Life insurance conversations should be built around the futures they help protect, according to TAL’s Daniel Barnes. Speaking to attendees at last week’s Australian Advisory Annual Conference in Adelaide, Barnes outlined some practical methods he’s seen successfully employed which strengthen engagement, communicate value and support lasting relationships.
In encouraging advisers to look beyond products and premiums to understand what clients most wanted to preserve, Barnes, who is TAL’s Regional Manager for Victoria, Queensland and Tasmania, told his audience: “You don’t sell insurance, you protect futures,” urging them to connect each stage of the insurance conversation back to what clients value most.
You don’t sell insurance, you protect futures…
Barnes outlined five key tips from his experience working with risk advisers.
- Explore the alternatives to insurance
When clients questioned premiums or preferred to invest the money, Barnes suggested exploring how they would otherwise manage the financial consequences of illness, injury or death.
Existing savings, asset sales and borrowing could all form part of that discussion, including the costs and practical limitations of each option.
…help clients articulate their financial vulnerability
The starting point, he said, was to help clients articulate their financial vulnerability, then consider how they would address it. He also acknowledged that self-insurance could be appropriate where clients had sufficient resources.
- Explain what cover remains when an exclusion applies
Barnes encouraged advisers to help clients understand the protection available when an insurer offered cover with an exclusion or premium loading.
An exclusion is not a rejection…
“An exclusion is not a rejection,” he said.
He suggested obtaining a clear explanation from the underwriter, including what cover remains, whether the terms could be reviewed, when a review might occur and what evidence would be required.
For clients without existing cover, he suggested focusing on the protection the proposed policy would still provide. Where replacement cover was involved, Barnes acknowledged the challenge of explaining trade-offs between existing and proposed terms.
- Revisit the original need before reducing or cancelling
When clients raised affordability concerns, Barnes said the first conversation should revisit why they took out the policy and whether that need remained.
That could lead to a discussion about reducing cover rather than cancelling it, while also considering whether changes in health might affect future access to insurance.
He stressed that needs can reduce as mortgages are re-paid, children become more independent and wealth builds and urged advisers to review cover at those points rather than leaving it unchanged.
- Make the experience count
Barnes illustrated the importance of practical client support through his own experience with former adviser Brad Fox, who supplied three fridge magnets carrying his contact details.
One was for his household and the others for family members, which was to help ensure someone always knew who to contact if assistance was needed.
The example showed how advisers can extend their impact beyond the norm and how they can support not only their clients but also those close to them when challenges arise.
- Build referrals through existing relationships
In his final tip, Barnes encouraged advisers to consider referral opportunities within their current client base, including clients whose occupations connected them with potential referral networks.
He also highlighted opportunities to introduce themselves, with the client’s agreement, to beneficiaries and people holding powers of attorney.
Delivering promised follow-ups and demonstrating ongoing value could provide a natural foundation for referral conversations, he noted.
Ask first and listen
Underlying the five tips was Barnes’s call for advisers to adopt a coaching mindset and resist moving too quickly into solutions.
He suggested asking how a household would cope if income stopped, what would have to change, and which aspects of family life clients would never want to surrender.
Make it personal, not transactional…
Advisers then needed to listen to and explore the answers, rather than answer their own questions or follow a rigid script.
“Frame protection around what they love,” Barnes said. “Make it personal, not transactional.”
